Based on the given transactions in July, the journal entry to record the payment of rent on July 31st is:
Date Account Title Debit Credit
July 31st Rent expense $3,000
Prepaid Expenses - Rent expense $3,000
<h3>How to write the journal entry for prepaid expenses?</h3>
Accounting uses the accrual basis which means that expenses are only recognized when they have been incurred and not when they are paid for. If you paid $40,000 for rent and yet your monthly rent is $5,000, only the $5,000 will be recognized as rental expense. The rest of the money is treated as a prepaid expense.
When another month elapses, then the other amount of rent can be recognized as is the case here. The month ended on July 31st and there was a need to record rental expense and so it was recorded at the rent expense of $3,000.
The journal entry would therefore show Rent Expense account is debited and the Prepaid Expenses account is credited to show it is reducing.
Full question is:
Record the journal entry to represent the payment of rent.
Find out more on prepaid expenses at brainly.com/question/27961230
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